Insurance catches up with reality of new relationships

Traditionally if you weren't either single or married there weren't a lot of insurance products out there for you.

"Given increasing acceptance of a whole range of new partnerships, underwriters have become more creative in how they structure insurance policy options", says Gari Dombo, Managing Director, Alexander Forbes, Personal Services.

Nowadays, "There are a variety of possible combinations; from single people to married couples, to married gays, to straights and gays in long term relationships (LTRs), plus various combinations of people who live together in the same accommodation."

Yet, says Dombo, "No matter how different or complex you might think your relationship is, it will most likely fall into one of three categories."

1. Closely knit individuals who live together in a relationship where there is intent to join interests. Examples include husband, wife, and family, married gays, common law marriages, and gay and straight people in LTRs.

2. Independent individuals living together where there is no intent to join their separate interests. Examples could include friends sharing a domestic arrangement but maintaining separate financial responsibilities, or gay or straight LTRs where each party maintains financial independence.

3. A loose-knit group where more than two people live together for economic or other convenience. Here examples include students sharing a digs close to university or people sharing a house close to work.

And, regardless of the type of relationship you are in, it is now fairly easy to make sure that you have an insurance policy thats suits your circumstances by:

1. Making sure that there is actually an insurable interest. In short, that the insured stands to suffer financially if the liability occurs.

2. Understanding each partys intentions. That is, whether they wish to insure their property jointly, separately or at all.

3. Accurately reflecting each of the parties intentions and insurable interest in the policy.

Where there is no intention to join interests, the insurance policy should accurately record, reflect and compensate each partys interests separately.

Should, however, two friends each owning property live together in a house with no intention of joining their separate interests, two separate policies could be issued - one for each person, insuring their goods and liabilities separately. Each person would decide the value of what they wished to insure, and would have liability cover up to the limit of the cover chosen.

Alternately, a single joint policy could be issued for Mr. Smith and Mr. Dlamini under which cover would be provided for each persons rights and interests separately. The liability limit would be shared between the two parties, and each person would need to keep a record of sums insured and an inventory of what belonged to whom.

In this set up, however, Dombo warns that, "If people made the mistake of issuing the policy in the name of only one of the parties, say, Mr. Smith, and the friendship went sour, Mr. Dlamini could be at risk of losing out altogether or being forced to litigate separately to get his share."

Finally, in the instance of two friends living together, in a gay or straight LTR, marriage, or common law partnership, where there was an intention to join interests, a policy would normally be issued in one persons name to cover all property and liability.

Dombo concludes that, "As such, insurance treats all people in LTRs the same. Married or not, gay or straight, you still can still be insured. In short, for insurance purposes, all LTRs are now treated as married couples were in the past."